basic problem in chapter 2 6) given the following information prepare in good fo
ID: 2545622 • Letter: B
Question
basic problem in chapter 2
6) given the following information prepare in good form an income statement for the dental drilling company
15) arrange the following items in proper balance sheet presentation
basic problem in chapter 3
3) polly esther dress shops, inc., can open a new store that will do an annual sales volume of $960.000. it will turn over its assets 2,4 times per year. the profits margin on sale will be 7percent. what would net income and return on assets ( investment ) be for this year?
4) bill's chrystal stores, inc., has assets of $ 5,000,000 and tuns over its assets 1.2 times per year. return on assets is 8 percent. what is the firm margin ( return on sales)?
7) the haines corp. shows the following financial data for 2009 and 2010.
8) neon light company has $ 1,000,000 in assets and $ 600,000 of debt. it reports ne income of $100,000.
a) what is the return on assets ?
b) what is the return on the stocholders'equity?
c) if the firm has an asset turnover ratio of 3 times, what is the profit margin ( return on sales)?
Explanation / Answer
For the "basic problem in chapter 2" and "7)", provide proper data.
I have solved the other questions:
3)
Net Income = Sales*profit margin = 960000*0.07 = 67,200
Return on assets = Net Income/ Assets = Net Income/(Sales/Asset Turnover ratio) = 67,200/(960000/2.4) = 16.80%
4)
Return on sales = Net Income / Sales = (Assets*ROA)/(Assets*asset turnover ratio) = (5000000*0.08)/(5000000*1.2)=0.066 = 6.60%
8)
a)Return on Assets = Net Income/ Assets = 100000/1000000 = 10%
b) Return on stockholder's equity = Net income/stockholder's equity = Net income/(Assets - Debt) = 100000/(1000000-60000) = 25%
c) Sales = Assets*Turnover ratio = 1000000*3 = 3,000,000
Profit margin(on sales) = Net Income/ Sales = 100000/3000000 = 3.30%
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